Learning Objective 10-3
1) A technique for using information from financial statements to formulate specific values to determine some measure of a company's financial position is called ________ analysis.
A) horizontal
B) vertical
C) time-series
D) ratio
2) Jack is comparing Team Shirts to Xtreme T's. He found that the gross profit ratio was 47% for Team Shirts and 50% for Xtreme T's. This is an example of ________ analysis.
A) horizontal
B) vertical
C) time-series
D) ratio
3) Ratios used to determine whether or not a company can pay its bills on time are ________.
A) liquidity ratios
B) solvency ratios
C) profitability ratios
D) market indicators
4) Ratios used to determine whether or not a company can survive over a long period of time are ________.
A) liquidity ratios
B) solvency ratios
C) profitability ratios
D) market indicators
5) Ratios used to determine whether or not a company can earn a satisfactory rate of return are ________.
A) liquidity ratios
B) solvency ratios
C) profitability ratios
D) market indicators
6) Ratios used to determine whether or not a company's stock is a good investment are ________.
A) liquidity ratios
B) solvency ratios
C) profitability ratios
D) market indicators
7) Liquidity ratios are used to determine whether or not a ________.
A) company's stock is a good investment
B) company can earn a satisfactory rate of return
C) company can pay its bills on time
D) company can survive over a long period of time
8) The debt-to-equity ratio is used to determine whether or not a ________.
A) company's stock is a good investment
B) company can earn a satisfactory rate of return
C) company can pay its bills on time
D) company can survive over a long period of time
9) Solvency ratios are used to determine whether or not a ________.
A) company's stock is a good investment
B) company can earn a satisfactory rate of return
C) company can pay its bills on time
D) company can survive over a long period of time
10) Profitability ratios are used to determine whether or not a ________.
A) company's stock is a good investment
B) company can earn a satisfactory rate of return
C) company can pay its bills on time
D) company can survive over a long period of time